This world's largest OEM company is about to hit A-shares. The prospectus shows that Foxconn's major shareholder is the Zhongjian Company, which is a 100% controlled subsidiary of Hon Hai Group.

Super Big Mac Foxconn listing plan has finally been announced. On February 9, the China Securities Regulatory Commission disclosed the prospectus for the initial public offering of Foxconn Industrial Internet Co., Ltd. (hereinafter referred to as "Foxconn"), the world's largest OEM company is about to hit A-shares.

prospectus shows that Foxconn's major shareholder is the backbone company, which is a subsidiary of Hon Hai Group's 3100% controlling stake. Hon Hai Precision is the "OEM giant" of electronic products all over the world, and its founder is Terry Gou .

However, Foxconn needs to cross several thresholds to enter the A-share market, including employee labor and social security and the company's establishment time is too short.

Want to get the "Office Factory" tag

The business that logs into the A-share market this time belongs to some of the assets of Hon Hai Precision.

As the first example of a Taiwanese-funded holding company seeking A-share listing, the main company that hit the listing this time has not been established for a long time. Its predecessor was Fujiang Technology, established in February 2015.

The company name of Foxconn plans to go public this time has added the words " Industrial Internet ", which has attracted the attention of regulators.

htmlOn December 9, the China Securities Regulatory Commission website posted feedback on the application documents for the initial public offering (hereinafter referred to as the "feedback"), requiring Foxconn to supplement the disclosure of the reasons why the company name contains "industrial Internet", whether these titles are objective, accurate and have sufficient basis Essence

For Foxconn, adding the word "Industrial Internet" to its name shows its intention to get rid of the OEM factory.

In 2017, Terry Gou emphasized in his public speech, "When I was invited to give a speech, I introduced that we are the largest OEM manufacturing company in the world. In fact, we were no longer just OEM 20 years ago."

html December 11 On the 1st day, a reporter from Beijing News called the person in charge of Foxconn's information disclosure. After the call was connected, it was the company's switchboard. After the call was transferred, no one answered.

The main business revenue accounted for the highest proportion of communication network equipment sales

However, Foxconn's main business revenue source is currently no fundamental difference from before.

prospectus shows that from 2015 to 2017, the company's main business revenue was RMB 272.12 billion, RMB 271.762 billion and RMB 353.082 billion, respectively. The company's main business revenue is mainly divided into communication network equipment, cloud service equipment, as well as precision tools and The three categories of industrial robots account for more than 90% of the main business revenue.

Among them, the company's communication network equipment accounts for the highest proportion. The proportion of communication network equipment sales revenue in 2015-2017 to the current main business revenue was 57.01%, 54.33% and 60.75% respectively.

Foxconn stated in its prospectus that "the company is mainly engaged in the design, research and development, manufacturing and sales of various electronic equipment products"; at the same time, it also disclosed that "unified technical standards are the most important basis for industrial Internet design solutions", The industrial Internet lacks unified technical standards" and "the industrial Internet is still in its early stage of development."

■ Focus

Foxconn's debt ratio doubles in one year

From a financial perspective, Foxconn's performance is relatively good.

According to the prospectus, Foxconn achieved operating income of RMB 272.8 billion, RMB 272.7 billion and RMB 354.5 billion from 2015 to 2017, respectively. Among them, operating income in 2016 decreased slightly by 0.03% compared with 2015, and operating income in 2017 increased by 30.01% compared with 2016. In terms of net profit, Foxconn was RMB 14.35 billion, RMB 14.37 billion and RMB 15.87 billion from 2015 to 2017, respectively, of which the net profit in 2016 increased by 0.11% compared with 2015, and the net profit in 2017 increased by 10.45% compared with 2016.

However, since its main business is OEM, Foxconn's gross profit margin is not high compared with other high-tech companies. The prospectus disclosed that in 2015, 2016 and 2017, the company's comprehensive gross profit margin was 10.50%, 10.65% and 10.14% respectively.

Foxconn said that although the comprehensive gross profit margin level in the past year has decreased, it has remained basically at a stable level overall and the company's profitability is good. The main reason is that the electronic equipment intelligent manufacturing industry is developing stably, the overall profit level of the industry is showing a stable upward trend, and the company's market position is stable; in addition, the company has formed a long-term cooperative relationship with customers, the order scale is large, and the sales and procurement prices are relatively stable.

corresponds to huge operating income, and Foxconn's balance sheet is also very large.

As of the end of 2017, Foxconn had a total assets of 148.6 billion yuan and a total liability of 120.4 billion yuan, with a debt ratio of about 81%, which has nearly doubled compared with the debt ratio of 43% as of the end of 2016. Its total liabilities as of the end of 2016 were 58.2 billion yuan, which means that Foxconn's liabilities increased by 62.2 billion yuan in 2017, an increase of 106.8%.

prospectus shows that as of December 31, 2017, the total amount of liabilities in the consolidated financial statements was 120.414 billion yuan, of which the total amount of current liabilities was 120.382 billion yuan and the total amount of non-current liabilities was 32 million yuan. The company's liabilities are mainly composed of accounts payable, other payables, short-term loans, employee compensation payable, etc.

The increase in Foxconn's liabilities is mainly due to the increase in accounts payable. According to the prospectus, at the end of 2017, the book value of the company's accounts payable increased by 33.796 billion yuan compared with the end of 2016.

Foxconn said that the main reason is that the downstream order volume has grown well since 2017, and the company has correspondingly increased the purchase amount of raw materials and equipment.

Single-person labor cost is 61,000 yuan

huge income and huge assets, corresponding to a huge employee team.

As of December 31, 2017, Foxconn had more than 269,000 employees. The huge labor volume has created high labor costs. In 2015, the direct labor cost of Foxconn's main business was 15.3 billion yuan, 14.8 billion yuan in 2016, and rose to 16.56 billion yuan in 2017. If calculated based on nearly 270,000 employees, the labor cost of a single employee of Foxconn is 61,000 yuan.

Recently, a payroll posted by a Foxconn employee has been rumored on the Internet. He only earned 2,586 yuan in January, but in February, because he worked overtime for 86 hours, his salary was 4,275 yuan.

Earlier, Foxconn's employment issues sparked discussion. In 2010, more than a dozen employees fell from buildings in Foxconn factories; in April 2013, two new employees jumped off the building and died.

The Beijing News reported in 2013 that the monotonous assembly line life and strict management systems were accused of being the "culprit" that brewed these tragedies. The mechanically suppressed work, endless overtime work, sudden scolding, and confusion about not seeing the future are all testing the psychological endurance of Foxconn workers, especially the "newcomer workers".

The CSRC has also paid attention to the above issues. On February 9, the CSRC asked Foxconn to explain in its "feedback" to the "Foxconn" additional explanation of the implementation of employee labor security laws and regulations and internal rules and regulations, as well as whether there are mass labor disputes or Serious individual labor disputes.

In 2016, a reporter from the Beijing News visited Foxconn, Shenzhen. Foxconn has established a worker union to carry out psychological counseling, vocational training, and group activities.

Foxconn said on its official website that in order to enhance the sense of belonging of employees, the group spent huge amounts of money to build complete facilities to create a good working, learning and living environment for employees, and to provide clothing, food, housing, transportation, medical care, and other aspects. convenient.

"Feedback" also requires the issuer to further disclose the company's "five insurances and one fund" payment, whether it is paid in full, and whether it complies with relevant national regulations; the number of people who have not paid social insurance and housing provident fund in each period of the reporting period and the number of people who have not paid social insurance and housing provident fund in each period of the reporting period and the number of people who have not paid social insurance and housing provident fund and have not been paid and Reasons for payment; whether the payment of social insurance and housing provident fund by issuers and their subsidiaries in each period of the reporting period is legal and compliant.

Foxconn stated in its prospectus that the issuer has applied for pension insurance, medical insurance, unemployment insurance, work-related injury insurance, maternity insurance and housing provident fund for employees of its domestic subsidiaries. Does the short establishment time of

affect its listing?

With the release of the prospectus, many media pointed out that Foxconn was established for too short and has been less than three years since then, which is inconsistent with the relevant documents, which may become its biggest flaw in its listing on the A-share market. However, this kind of thing that a listed company does not meet the listing requirements in one aspect is not the first time it has occurred. There have been many precedents for special listing.

According to Article 9 of my country's "Management Measures for the Initial Public Offering and Listing", "The issuer shall have a continuous operation period of more than 3 years since the establishment of a joint-stock company, except as approved by the State Council. A limited liability company shall be based on the original book. If the net asset value stock is changed to a joint stock company as a whole, the duration of operation can be calculated from the date of establishment of the limited liability company."

In this regard, Foxconn also mentioned in its prospectus that the company has been operating for less than three years, and the company has applied for exemption from the competent department in terms of the above circumstances.

Beijing News reporter noticed that Hon Hai Precision has been established for many years, so The platform company that plans to log in to the A-share market is Foxconn Industrial Internet Co., Ltd., which has a short establishment time.

According to the prospectus, on February 9, 2015, the Shenzhen Municipal Economic, Trade and Information Technology Commission issued the "On the Establishment of Foreign Investment" Notice of the Enterprise Fujiang Technology (Shenzhen) Co., Ltd., approved the establishment of Fujiang Technology, with a total investment of US$45 million, which is only three years since now.

On July 10, 2017, all shareholders of Fujiang Technology held a founding meeting and made The relevant resolution on the establishment of Foxconn Industrial Internet Co., Ltd. agreed to jointly initiate the establishment of Foxconn shares through a overall change. Fujiang Technology's claims and debts are inherited by the changed joint-stock company, less than a year away.

In this regard, A law firm person told the Beijing News on February 11 that Foxconn has just released its prospectus. Whether the short establishment time is an obstacle to listing will depend on the exemption of the competent department in the future, and it still needs official information. But refer to past experience Judging from the situation, companies like Foxconn, which are of great significance to the national economy, will not face too much resistance in supervision and may enjoy special approval treatment. (Reporter Zhao Yibo)